KUALA LUMPUR (April 13): Malaysian palm oil futures closed nearly 3% lower on Monday, hurt by expectations of higher stockpiles in April and lower exports due to coronavirus-led lockdowns in many countries.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down RM65, or 2.81%, to RM2,247 per tonne, after last week’s 3% jump.
Malaysia’s exports during April 1-10 fell between 6.6% and 12% from the month before, cargo surveyors said on Friday.
“Exports to India, China and the EU are expected to remain subdued given the ongoing Covid-19 threat and India’s recent lockdown,” Adrian Kok, an equity analyst at Kenanga Investment Bank, said in a research note.
“Nonetheless, back-loaded demand from India could be on the cards, considering its depleting oils and fats inventory during the lockdown.”
Palm oil inventories in Malaysia, the world’s second-largest producer of the vegetable oil, were higher than expected last month, rising 1.67% from February, while output increased 8.4%, official data showed on Friday.
“We project stocks to rise 4% month-on-month to 1.8 million tonnes at end-April as lower exports offset weaker output,” Ivy Ng, regional head of plantations research at CIMB Investment Bank, said in a note.
Indonesia consumed 2.1 million kilolitres of unblended biodiesel in January-March and is likely to miss its consumption target this year, Andriah Feby Misna, director of bioenergy at the energy ministry told Reuters on Monday.
Oil prices turned negative on Monday, erasing gains made after major producers agreed record global output cuts, pressured by concerns that the cuts will not be sufficient to head off oversupply as the coronavirus pandemic hammers demand.
Dalian’s most-active soyoil contract gained 0.49%, while its palm oil contract fell 2.14%. Soyoil prices on the Chicago Board of Trade were down 0.77%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source : The Edge Markets
